Adds PIF's comments, context and background

DUBAI, Jan 22 (Reuters) - Saudi Arabian digital security firm Elm Company 7203.SE said on Wednesday that it had agreed to acquire business services firm Thiqah from the kingdom's sovereign wealth fund in a deal valued at 3.4 billion riyals ($906.28 million).

Elm, which offers services in information security, consulting, credit information exchange, and data centre operations, said in a bourse statement that it signed a cash-based share purchase agreement with the Public Investment Fund (PIF) to acquire Thiqah, following discussions that started in 2023.

Thiqah is fully owned by sovereign wealth fund PIF, which is also the majority shareholder in Elm.

"The acquisition supports Elm's growth ambitions and will reinforce its position as a national provider in the digital services space," Elm said.

PIF, which has around $925 billion in assets under management, is the chosen vehicle of Crown Prince Mohammed bin Salman, the kingdom's de facto ruler, to drive an economic agenda aimed at weaning the Gulf country's economy off oil.

Since the crown prince took charge of PIF in 2015, it has transformed from a staid state holding company into an aggressive purchaser of assets and helping local companies grow into national champions.

PIF said the deal will help drive innovation, and localize technologies and knowledge by strengthening Elm to lead the sector at the national level.

The transaction is expected to close once regulatory approvals are received and certain conditions under the agreement are met.

HSBC Saudi Arabia is serving as the financial adviser to Elm on the transaction.

($1 = 3.7516 riyals)

(Reporting by Rachna Uppal and Hadeel Al Sayegh; Editing by Sherry Jacob-Phillips)

((rachna.uppal@thomsonreuters.com;))